ACCT 557 Final Exams

ACCT
557 Final Exams

(TCO A) Benny Building, Inc. won a bid for a new
warehouse building contract. Below is information from the project accountant.
(TCO B) At the beginning of 2012, Barbara, Inc. has
a deferred tax asset of $8,000 and deferred tax liability of $6,500. In 2012,
pretax financial income was $600,000 and the tax rate was 35%.
(TCO C) Presented below is pension information
related to Baked Goods, Inc. for the year 2013
(TCO C) Bunny Hopping, Inc. sponsors a
defined-benefit pension plan. The following data relate to the operation of the
plan for the year 2013
(TCO D) Bucky, Inc. leased equipment from Green
Enterprises under a 4-year lease requiring equal annual payments of $65,000,
with the first payment due at lease inception. The lease does not transfer
ownership, nor is there a bargain purchase option. The equipment has a 4-year
useful life and no salvage value. Bucky, Inc.’s incremental borrowing rate is
10% and the rate implicit in the lease (which is known by Pisa, Inc.) is 8%.
Assuming that this lease is properly classified as a capital lease, what is the
amount of interest expense recorded by Bucky, Inc. in the first year of the
asset’s life?
(TCO E) On December 31, 2013, Antique Salvage, Inc.
appropriately changed its inventory valuation method from weighted-average cost
to FIFO method for financial statement and income tax purposes. The change will
result in a $1,000,000 increase in the beginning inventory at January 1, 2013.
Assume a 40% income tax rate. The cumulative effect of this accounting change
on beginning retained earnings is
(TCO E) Which of the following is not a change in
accounting estimate?
(TCO F) Balancing Act, Inc. recognized net income of
$489,000 including $7,500 in depreciation expense
(TCO G) The disclosure of accounting policies is
important to the financial statements when determining
(TCO G) Adventure, Inc. is a company that operates
in four different divisions. The following information relating to each segment
is available for 2013
(TCO A) Bentley Corporation has several divisions.
All operations keep their own accounting books and have chosen the appropriate
method of revenue recognition
(TCO B) Buffy, Inc. qualifies to use the
instalment-sales method for tax purposes and sold an investment on an
instalment basis. The total gain of $750,000 was reported for financial
reporting purposes in the period of sale. The instalment period is 3 years; one
third of the sale price is collected in 2012 and the rest in 2013. The tax rate
was 40% in 2012, 35% in 2013, and 35% in 2014. The accounting and tax data is
shown below
(TCO D) Bing Leasing, Inc. agrees to lease equipment
to Boyd, Inc. on January 1, 2012. They agree on the following terms:
(TCO F) Financial data of Beautiful Beadwork Company
for 2013 and 2012 are presented below
(TCO G) Selected financial ratios
The following
information pertains to Allbright, Inc.
(TCO E) Changes in accounting principle include direct
and indirect effects. Please discuss how the indirect effects of a change in
accounting principle should be treated and disclosed